Turn5

Summary

Financial Advisor

Paoli, PA

Turn5 is a leading e-commerce retailer specializing in aftermarket automotive parts and accessories. The company provides high-quality parts, tools, and customer service for car and truck enthusiasts who want to customize or enhance their vehicles.

Turn5, originally started in a garage, grew rapidly into a leader in eCommerce for DIY car enthusiasts but faced challenges with losses from new product launches, tight margins, and high inventory levels. Carl Marks Advisors (CMA), engaged by the lender, identified key issues in inventory management, such as excessive stock of slow-moving items and a focus on 100% fill rates. CMA worked with the company to balance inventory with demand, shift focus to private-label products to reduce competition, and confirm the efficiency of a new distribution facility to support future growth.

Key Challenges

Fast Growth

Tight Margins

Lack of Liquidity

Inexperienced Management Team

Engagement Highlights

Reviewed historical results to identify areas of challenge in a high growth industry.
Met with senior management team to identify areas of concern. Realized that the majority of the management team were family members with little experience outside of Turn5. Worked with team on identifying best practices and improving discipline.
Analyzed inventory levels, fill rates and turns. Determined that the company was focused on 100% fill rates and had set EOQ to insure 6-month supply of inventory. Also determined that the company realized the majority of revenue from 10% of its SKUs and was not focused on bringing down inventory levels of slow movers.
Worked with the company on balancing inventory levels and demand.
The nature of eCommerce allows consumers to shop for the lowest price and commoditize items. Worked with company on private label products that were lower cost and not available from competitors.
Site visit to new distribution facility, met with management team and confirmed that company’s new facility would allow for growth in an efficient pick-pack operation.

Turn5

Summary

Financial Advisor

Key Challenges

Engagement Highlights

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